Gold At Or Near Highest Price Ever Against 72 Paper Currencies!

Transcription

1 January 2019, Volume 25 Issue 1 Liberty Coin Service s Monthly Review of Precious Metals and Numismatics January 16, 2019 Gold At Or Near Highest Price Ever Against 72 Paper Currencies! Gold s 2018 Performance Versus Selected Currencies Currency 2018 Gold Price Change Argentine Peso +96.4% Russia Ruble +18.3% Brazil Real +14.7% South Africa Rand +13.7% Chile Peso +10.4% Australia Dollar +8.4% India Rupee +6.4% Colombia Peso +6.2% Canada Dollar +6.1% Sweden Krona +6.1% Israel Shekel +5.2% Indonesia Rupiah +4.5% Great Britain Pound +3.8% China Yuan +3.5% New Zealand Dollar +3.3% Denmark Krone +2.8% Euro +2.4% South Korea Won +2.1% Philippines Peso +1.9% Peru New Sol +1.8% Taiwan Dollar +0.9% Singapore Dollar -0.2% Malaysia Ringgit -0.4% Switzerland Franc -1.4% Hong Kong Dollar -1.9% US Dollar -2.1% Mexico Peso -2.3% Thailand Baht -3.8% Japan Yen -4.7% The price of gold declined 2.1% at the end of 2018 compared to a year earlier. But, that does not tell the whole story of the relative strength of the yellow metal. Ross Norman, the CEO of Sharps Pixley Ltd in London (a company that for a long time was one of the five that set the London daily gold fixes) and a long-time observer of precious metals markets, issued an analysis early this week listing 72 currencies against which gold is either at or within a few percentage points of its all-time high. Here in North America, the Canadian dollar and Mexican peso are two of those currencies Annual Results Precious Metals Palladium +16.6% Gold -2.1% Silver -9.3% Platinum -15.0% Numismatics LCS Invest Blue Chip Coins Index +0.5% LCS Investor Rare Coins Index +0.0% LCS Collector Generic Coins Index +0.0% US Proof Sets, % LCS Collector Key Date Coin Index -0.4% LCS US Currency Index -1.1% US MS-63 $20 Liberty -2.0% US MS-63 $20 St Gaudens -2.8% US Silver Proof Sets, % US MS-65 Morgan Dollar, Pre % US Proof Silver Eagles, % US Dollar vs Foreign Currencies Argentina Peso % Russia Ruble +20.9% Brazil Real +17.2% South Africa Rand +16.2% Chile Peso +12.8% Australia Dollar +10.7% India Rupee +8.8% Colombia Peso +8.6% Canada Dollar +8.5% Sweden Krona +8.4% Israel Shekel +7.5% Indonesia Rupiah +6.8% Great Britain Pound +6.0% China Yuan +5.8% New Zealand Dollar +5.6% Denmark Krone +5.0% Euro +4.7% South Korea Won +4.3% Philippines Peso +4.2% Peru New Sol +4.0% Taiwan Dollar +3.1% In South and Latin America and the Caribbean, gold is at or close to its highest ever against currencies from Argentina, Brazil, Chile, Colombia, Dominican Republic, Haiti, Honduras, Jamaica, Nicaragua, Paraguay, Surinam, Uruguay, and Venezuela. Gold is strong against European currencies from Belarus, Georgia, Hungary, Norway, Russia, Sweden, Turkey, and Ukraine. Singapore Dollar +2.0% Malaysia Ringgit +1.8% Switzerland Franc +0.8% Hong Kong Dollar +0.2% Mexico Peso -0.2% Thailand Baht -1.7% Japan Yen -2.6% U.S. Dollar Index % US And World Stock Market Indices Sao Paulo Bovespa +15.0% NASDAQ -3.9% Dow Jones Industrial Average -5.6% Standard & Poors % Australia S&P/ASX % Nikkei % Russell % London FT % Dow Jones World (excluding US) -16.4% Frankfurt Xetra DAX -18.3% Shanghai Composite -24.6% 10 Year US Treasury Note interest rate 2.684% % Energy and Other Metals Molybdenum +54.8% Tin -1.9% Nickel -13.6% Aluminum -16.6% Copper -16.7% Natural Gas, Henry Hub -17.3% Lead -19.5% Crude Oil, Brent -19.6% Zinc -24.1% Cobalt -27.3% Metal Content Value Of U.S. Coins Lincoln cent, Lincoln cent, 1982-date 0.65 Jefferson nickel, non-silver 3.56 Roosevelt dime, 1965-date 1.61 Washington quarter, 1965-date 4.04 Kennedy half dollar, 1971-date 8.07 Asian and Oceana currencies that are at or near their weakest against gold come from Afghanistan, Australia, Azerbaijan, Bhutan, Brunei, India, Japan, Kazakhstan, Kyrgyzstan, Indonesia, Iran, Malaysia, Mongolia, Myanmar, Nepal, North Korea, Pakistan, Papua New Guinea, Saint Helena, Sri Lanka, Syria, Tajikistan, Tonga, and Uzbekistan. Gold is now at or near all-time highs against twenty-five African currencies: Inside this issue: Precious Metals Results For 2018 page 2 Looking Ahead To 2019 page 4 Apollo 11 Coins Debut January 24 page

2 (Continued from page 1) Algeria, Angola, Botswana, Burundi, Congo, Egypt, Ethiopia, Gambia, Ghana, Guinea, Lesotho, Liberia, Malagasy, Malawi, Namibia, Nigeria, Rwanda, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Tunisia, Uganda, and Zambia. This list does not include nations such as Zimbabwe whose currencies have failed this century. Obviously, residents of those countries are now be better off financially if they had part of their wealth in gold than if they just had paper assets such as stocks, bonds, and currencies denominated in the local currencies. Even currencies that were strong against the price of gold in 2018 such as Malaysia, Mexico, and Japan have since slid somewhat against the price of gold to now be included among the 72 currencies on Ross Norman s list. Does this strength of the price of gold against so many currencies other than the US dollar signify anything to Americans? I believe it does. In short, I expect that the US dollar within 2-3 years will also be on this list. The price of gold would need to rise close to its September 2011 peak over $1,900 for this to occur. There are many reasons for this forecast. Here are three bits of background for right now, but look for more discussion later in this issue: Since the US government established the Federal Reserve Bank in 1913, the US dollar has fallen in value more than 98% against an ounce of gold. In recent years, the Federal Open Market Committee has repeatedly stated a goal of knocking down the purchasing power of the US dollar by at least 2% annually. In the second paragraph of the December 19, 2018 FOMC announcement it reads, Consistent with its statutory Gold, silver, and copper coins, exonumia, paper money, and other collectibles. On ebay, search for sellers Treasurechestofliberty or Collectablesofliberty. Other items are listed for sale on the LCS website at mandate.... Inflation near the Committee s symmetric 2 percent objective over the medium term. Over the past month, especially following the FOMC December 19 announcement, the US Dollar Index is down almost 2%. Multiple times over the past couple of years, I have warned that the FOMC was at a high risk of raising the federal funds interest rate enough times that it would negatively impact US stock markets. In anticipation that the Fed would impose a fourth interest rate hike in 2018, US stock markets peaked in early October last year. The December 19 Fed announcement accelerated this decline. After Christmas, there has generally been a net increase in US stock indices, but I suspect much of this occurred as a result of actions engineered by the President s Working Group on Financial Markets (also known as the Plunge Protection Team). The four members of this panel are the Secretary of the Treasury, the Federal Reserve Chair, the Chair of the Securities and Exchange Commission, and the Chair of the Commodity Futures Trading Commission. The US government is explicitly authorized to use its Exchange Stabilization Fund, established in 1934, to manipulate stock and bond markets and the price of gold. The release of declassified government documents since then have confirmed that such actions have happened repeatedly since the mid-1930s. As you can see on the daily US closing spots table on page six, the price of gold jumped 3.4% from the close on December 18 through January 3. At the same time, the price of silver rose 7.7%. I suspect that the reason gold and silver prices were allowedto rise to this extent is that the Plunge Protection Team was focusing all of its time and resources on stopping the panicked decline in US stock indices. For the past ten consecutive trading days, the price of gold has risen above $1,290, threatening to top the psychological level of $1,300. Not only did the price of silver in the past four weeks soar back above $15.00, it threatened to top $16.00 intraday two weeks ago. As I have said before, the prices of gold and silver unofficially serve as a report card on the US dollar, US government, and US economy. It the prices of these two metals are rising significantly, that is bad news for the US government. It s interest payments on debt could soar as each 1/4% increase in the rate would add $55 billion to annual interest costs. Foreigners would also be less willing to hold US dollars and Treasury debt, as has happened over the past month in driving down the US Dollar Index. Central banks would accelerate their dumping of US dollars to replace those reserves with gold or other currencies. All of this gives the US government a huge 2018 Agricultural Commodity Track Record Human Food Wheat, hard KC +22.8% Oats #2 Minneapolis +21.9% Broilers, Dress ANational +7.1% Corn #2 yellow +7.1% Beef, choice +4.1% Butter, AA Chicago +0.5% Cheddar cheese, bulk -7.1% Sorghum (Milo) #2 Gulf -9.1% Soybeans #1 yellow -9.2% Hogs, Iowa -9.3% Eggs, large white Chicago -20.7% Corn oil, crude wet/dry mill -22.3% Comparisons of year-end wholesale price changes do not reflect interim price volatility. Also, this is not a comprehensive analysis. However, they do provide some indication of what to anticipate for consumer price changes in incentive to suppress gold and silver prices, which it has acknowledged doing over many decades. Since January 3, gold and silver prices have been building a base. In my judgment, a breakout from this trading range is more likely to be to higher levels than downward. But, before I list more reasons for this prediction, lets take a look back at how precious metals markets performed in Precious Metals Results For 2018 Here is a snapshot of how the four precious metals performed in 2018: Gold: December 29, 2017 $1, High for the year April 11, 2018 $1, Low for the year August 16, 2018 $1, December 31, 2018 $1, Net change for year -$28.00 Silver: December 29, 2017 $17.06 High for the year April 19, 2018 $17.22 Low for the year November 13, 2018 $13.95 December 31, 2018 $15.47 Net change for year - $1.59 Platinum: December 29, 2017 $ High for the year January 25, 2018 $1, Low for the year August $ December 31, 2018 $ Net change for year -$ Palladium: December 29, 2017 $1, December 31, 2018 $1, Net change for year +$178.00

3 (Continued from page 2) Even though gold and silver prices declined in 2018, gold outperformed all major US stock indices and most major foreign indices. Silver bested the results of the Russell 2000 and a wide swath of major foreign stock indices. If you look at the table on the front page of this issue, you will see that gold and silver prices in 2018 did better than most commodity metals and energy products. Given that comparison and the likelihood that precious metals prices were suppressed, one may judge that gold and silver didn t do too bad in Platinum is almost exclusively an industrial metal, with virtually no monetary usage. As such it s price will tend to follow the prices of industrial metals more than precious metals, which is what occurred in Palladium in 2018 continued to benefit from the temporary supply squeeze of physical metal. Russia is the world s largest supplier. That country s mining infrastructure, on average, is in poor condition to ramp up production. Further, with the US sanctions imposed against Russia, there is little incentive for Russia to make any particular effort to increase output. I would be more inclined to take advantage of the current high price to either sell it for a profit or to swap it for either bullion-priced gold or silver. Numismatics In 2018 I could probably take an entire issue discussing the numismatic markets, but will refer to the LCS indices in the table on the front page. The US Proof Silver Eagle Index mostly declined along with the fall in the silver spot price. The same could be said for the declines in the prices of the MS-63 $20.00 Liberty, MS-63 $20. Saint Gaudens, and the MS-65 Morgan Silver Dollar. Outside of those, the rest of the numismatic indices were pretty much flat for One minor surprise was a small decline in the US Paper Money Index, which has gone up almost every year since it was created in 1988, having risen more than 300% over the three decades. This analysis of US Large Size Paper Money that was issued from 1861 to 1928 only turned negative because of a major decline in prices of lower quality specimens of one specific note the 1896 $5.00 EducationalSilver Certificate. This note is relatively rare compared to most of the notes in the Index, meaning that it s price decline had an outsize impact on the overall Index compared to how often such notes change hands. At the huge Florida United Numismatists coin show in Orlando last week, I scoured lots of paper money inventory, but saw few $5.00 Educationals all of which were priced too high to reflect good value. Generally, my experience with the US Paper Money market is that demand is solid (meaning it is strong). If dealers can get nice notes in stock and price them reasonably, then won t last long. Pre-1934 US Gold Coins were weak almost the entire year, except for a couple minor spurts. One or two central banks had released some of these coins from their reserves, which meant that some types and some specific dates (such as the 1907 $10.00 Indian) were far more plentiful than usual. Falling gold prices didn t help either, though rising prices late in the year has spurred a small jump in customer interest. Lower prices also mean that the hunt for Better-Date US Gold Coins that sell for much closer to common-date issues than their relative rarity indicates continues to be just as challenging as ever. We do have a couple great examples in our Better-Date US Coin Bargains flyer. Please check them out. Morgan and Peace Silver Dollars were relatively quiet for the year, tending to decline as the price of silver sagged. As with the Pre-1934 US Gold Coins, though, trying to find the Better-Date issues that trade closer to common-date prices than their rarity would lead you to expect continues to be tough. Our experience is that savvy collectors tend not to sell during market dips, which decreases supplies until prices come back up. Ancient and Medieval Coinage: Another continuing area of strong demand is for Ancient and Medieval Coinage. One reason is that there has been a tremendous surge in numismatic research of these coins over the past decade or so. We have seen for over half a century now that whenever a numismatic niche is well researched that the number of collectors in that niche grows. But be warned. It seems like about half the dealers in this market sector are pricing their coins at prices % higher than what other dealers are charging and sometimes finding customers. Many issues are up noticeably in price from a few years ago, although we cannot think of a practical way to create a useful index to track price changes. One warning though, a massive hoard of 30,000 pieces of the Athens OwlTetradrachms are now being liquidated onto the market. These are among the most popular Ancient Greek Coins. Prices have fallen. Once this hoard is dispersed, we expect prices to recover to a degree. Because of this we are on the hunt for bargains but they are tough to come by. Patrick A. Heller s Upcoming Speeches and Appearances February 9 and April 13, 2019, East Lansing, Michigan. Boy Scout Troop 2 Coin Collecting Merit Badge Workshop. Not open to the general public. June 19-20, 2019, East Lansing, Michigan. Coin Collecting For Fun & Profit class at the 4-H Exploration Days at Michigan State University. Not open to the general public. Patrick A. Heller has delivered hundreds of programs over the years and is available to make presentations on a variety of subjects, including: Collecting Coins For Fun And Profit Consumer Protections When Buying And Selling Physical Precious Metals Create Fun-Filled Numismatic Presentations For The General Public Fun With Money Oops! A Lighthearted Review Of Design Mistakes On Circulating US Coins The Rise And Fall Of Rome s Money, And What It Means For America Today The Story Behind Michigan s 2018 Pictured Rocks National Lakeshore Quarter Why You Should Own Some Bullion- Priced Physical Silver Presentations run anywhere from minutes plus time for questions and answers. For more information on any event or to arrange for a presentation at schools, senior citizen groups, coin clubs, Scout organizations, fraternal or business organizations, call or him at path@libertycoinservice.com. The relative flat numismatic indices are actually stronger than we have seen for several years. For that reason, I am encouraged that we may have passed the bottom of the US numismatic cycle. If gold and silver prices rise over the course of 2019, that will underpin a likelihood of generally rising prices. Century-To-Date Results For Selected Financial Assets As I usually do at the beginning of each year, I like to take a longer perspective on asset performance than just a single year. So, before I look forward, let s first look further back. One year results do not represent a long-term track record. But, be careful longer-term comparisons can always be cherry-picked for the starting date so as to skew results. (Continued on page 4)

4 (Continued from page 3) of In recent years, I have compared century-to-date results of various assets, as measured in US dollars. The latest update is below. This is an absolute change, not a compounded annual calculation (it also does not take into account dividends that stocks may have paid). Just keep in mind that the results show precious metals more favorably than if I had, for instance, used December 31, 1979 as my starting point. Asset Change In Value As Measured In US Dollars 12/31/1999 to 12/31/2018 Gold % Silver % Palladium % Russell % MS-63 $20 St Gaudens % MS-63 $20 Liberty % Dow Jones Indust Avg % Platinum +86.4% Standard & Poors % NASDAQ +63.1% Switzerland Franc +62.3% MS-65 Morgan Dollar +32.6% China Yuan +20.4% Euro +13.9% Australia Dollar +7.5% Canada Dollar +6.7% Japan Yen -6.9% Great Britain Pound -21.1% Mexico Peso -51.8% Brazil Real -53.4% South Africa Rand -57.1% This longer term perspective is illuminating. By starting near a low point for precious metals, you can see that they have performed favorably compared to stocks and currencies over the past 18 years. This reinforces the point that it makes sense to have some portion of your net worth or investment portfolio allocated to bullion-prices physical precious metals and maybe even some riskier numismatic assets. This list also points out a political deception coming out of Washington, DC. Despite the pretense by many American politicians and bureaucrats that the Chinese government is suppressing the value of the yuan, and it did decline against gold and the dollar last year, it has actually appreciated versus the dollar over the past 18 years. Looking Ahead to 2019 How will precious metals and the US stock markets perform in 2019? I don t know. But I can see some factors that will affect markets and/or gold and silver: US stock prices will not get a further boost from the windfall profits of major new tax cuts such as those that were enacted at the end The new division of political power in Washington, DC increases uncertainty in financial markets. Greater uncertainty increases risks for longterm business planning and for investors. Businesses will become more cautious before proceeding with major long-term expansion of facilities and staffing. Investors will tend to shift some of their assets toward safe-havensof which physical gold and silver are some of the more popular options. The class action lawsuits filed as a result of 2017 and 2018 convictions and plea bargains for manipulating (and overall suppressing) precious metals prices are likely to result in less price suppression activity in The impact of the US Supreme Court June 2018 decision in South Dakota versus Wayfair has opened the door for state governments to try to require more out-of-state merchants to collect sales taxes on transactions with customers in those states. Businesses, consumers, and state governments are still a long way from understanding just how much such efforts will burden small businesses and ultimately hurt the US economy. Look for the crises wrought by state government actions in reaction to this court decision to get worse as the year progresses. Unfortunately, there will probably be no relief until 2020 or beyond, long after the US economy has suffered damage. The fall in US stock markets following the Federal Open Market Committee s decisions to increase the federal funds interest rates in their September and December 2018 meetings is almost certain to put greater pressure on the Fed to curtail indicated future interest rate hikes in In the December 19 FOMC announcement, Federal Reserve Chair Jerome Powell projects another two interest rate increases in It is even possible that any 2019 and even 2018 hikes may be reversed before the end of There has been so much negative reaction to the latest rate increase that Powell and two presidents of regional Federal Reserve Banks have already hinted that there may not be any further interest rate increases. By the way, an indicator called the near-term forward spread turned negative on January 2 for the first time since March This indicator reflects the difference between the current yield on 3-month US Treasury debt and what the financial markets expect that rate to be 18 months from now. As such, this indicator is pointing to a reduction of the federal funds interest rate in about twelve months. Unfortunately, any cessation of federal funds interest rate increases would almost certainly contribute to a declining value of the US dollar against other currencies. Although central banks have been reducing their holdings of US dollars and Treasury debt, the higher interest rates in the US and rising political and economic uncertainty in other parts of the world has encouraged more foreigners in the private sector to acquire US Treasury debt as a safe haven. If interest rates stabilize or decline, that will discourage demand for US dollars and Treasury debt. In effect, the Federal Reserve has boxed itself into a no-win corner. Unless some last minute change comes up, the United Kingdom will leave the European Union on March 29. Just how this will transpire is not clear right now. A negotiated plan between the British government and the European Union was soundly defeated in the British Parliament yesterday, increasing uncertainty around the world. Professor Otmar Issing was one of the most important proponents for the creation of the euro currency. He left the board of Germany s central bank to serve as the founding chief economist and on the board of the European Central Bank, which oversees the euro currency. About the long-term prospects for the euro, he recently stated, One day the house of cards will collapse. In his analysis, the Eurozone has been used to effectively subsidize major French and northern European banks at the expense of several southern Eurozone member nations such as Greece, Italy, Spain, and Portugal. While the subject is not a new factor, the importance of it will take on more ominous tones in unfunded liabilities for government employee pensions and retiree health care benefits. Rather than honestly facing the magnitude of the existing crisis which, if you also include Social Security and Medicare, exceeds a net present value (Continued on page 5)

5 (Continued from page 4) for the federal government in excess of $100 trillion plus another $10-15 trillion for state and local government, politicians and bureaucrats are avoiding the looming catastrophe or making too little, too latehalfhearted attempts to appearto be doing something. In Michigan, for instance, the state government considers that any of the county or local government or agency pension or retiree health care plans that are less than 60% funded need extra scrutiny and must submit a plan for corrective action to eventually fund over 60% of the liabilities. The problem with this threshold is that the financial standards are that any such plan less than 70% funded will never be able to make all promised benefits. Thus, the Michigan state government solution guarantees it will not solve the crises. As government labor union contracts come up for negotiations this year (such as for the city of Lansing where Liberty Coin Service is located), underfunded retirement benefits will be a major point of conflict. There were two major mergers of gold mining companies. In September, Barrick Gold Corp. acquired Randgold Resources Ltd. to form what was, at the time, the world s largest gold mining company. Then, on Monday this week, Newmont Mining announced that it was buying Goldcorp Inc. for $10 billion to form an even larger gold mining company. In both instances, the mergers were not done in anticipation of expanding existing operations. Instead, the owners hope to increase profits by cutting overhead. Such an orientation points toward a stagnant or maybe even declining volume of newly mined gold in the future. Obviously, there are many other factors that will impact US stock markets and precious metals prices in One thing I have not discussed is the impact of the markets for cryptocurrencies. In 2017, we did help a handful of customers liquidate the gold and silver coins and ingots who said they were going to put the proceeds into one of the cryptocurrencies. It turned out that prices peaked in mid-2017 and were well down from those levels in We did not really have any customer last year say they were cashing out their gold or silver to purchase cryptocurrencies. Overall, the impact was probably neutral on the precious metals markets. Having said that about cryptocurrencies, though, I did see a handful of attempts to develop a cryptocurrency that could somehow be redeemable in physical precious metals. I did not see enough detail on any of these to figure out if they were sensible. Obviously, some people consider cryptocurrencies to be just as risky as government fiat (paper) currencies that would appear more stable if they were backed by real money gold and silver. The important lesson to draw from these all of these points is that it would be even more prudent in 2019 to include an allocation to precious metals as part of one s investment portfolio, an allocation that I call wealth insurance. Even as I advocate owning some physical precious metals, I am not suggesting owning them to the exclusion of any other investments. As you can see in the table to the upper right of this page, my recommendation for most people would be the conservative allocation of just 10-15% of one s net wealth or portfolio be devoted go gold and silver. This should be sufficient to protect you if the US dollar or paper investments such as stocks or bonds keep going down or even crash. As for the breakdown between gold and silver, I expect silver will outperform gold over the next few years. But, because I could be wrong, I still suggest a significant allocation into bullionpriced gold products. By the way, if you are new to purchasing physical precious metals, you may want to review some recent columns I wrote to help you get started. Go to libertycoinservice.com/news/ and click on the articles titled Deciding to own physical precious metals, Assess dealers before you buy metals,and Palladium star performer in (the second half of this column). A year ago I stated that I could just about guarantee that the value of the US dollar would decline by the end of Instead, the opposite occurred. At the end of 2017, the interest rate on 10-Year Treasury Notes was at 2.409%. It rose during 2018 to exceed 3.1% for a time. Then, as foreigners started purchasing US Treasury debt for the safehaven and relatively high rates, the rate tumbled, closing 2018 at 2.684%. Yes, that equates to an increase of more than 11% in the yield, but that also means that existing outstanding Treasury debt fell in value by about the same amount. Summary Of Current LCS Recommendations For Precious Metals and Rare Coins How much of your total net worth should be in precious metals and rare coins? Conservative Moderate Aggressive 10-15% 20% 25-33% How much to allocate for each category of precious metals and rare coins?* Conservative Moderate Aggressive Gold 40% 35% 25% Silver 60% 55% 50% Rare Coins 0% 10% 25% TOTAL 100% 100% 100% *Platinum and palladium both have volatile markets with long-term supply/demand fundamentals that are not as attractive as those for gold, silver or rare coins. While either or both might outperform gold, silver, or rare coins in the short- to long-term, to be conservative we have omitted them from our allocation. Today I have a lot more respect for the ability of the US government to manipulate markets. Also, the US government is in competition with pretty much every other government that is also trying to devalue their currencies. That makes it far more difficult to forecast what oughtto happen. Accordingly, even though I am convinced that the value of the US dollar will fall sharply and perhaps even collapse eventually, I hesitate to make any more shorter-term predictions Gold And Gold Coins Gold ended today at $1,292.75, a solid increase of $71.25 (5.8%) from a month-and-a-half ago. I would not yet consider this a real boom until the price of gold can top its peaks in 2017 and 2018 which were just under $1,360. Pretty much all products remain in ready supply for immediate or only short-delay delivery. The US Mint reported that its 2018 sales of US Gold American Eagles ( %) were to fewest total ounces since Still, the quantities sold were high enough that it will not result in any extra premium to obtain 2018-dated coins. My low-premium favorites among bullion-priced gold products are still the US American Arts Medallions (1.0%), the Austria 100 Corona (1.5%), and the Mexico 50 Pesos (2.3%). However, each of these have drawbacks that deter some would-be purchasers. The 1 ounce and 1/2 Ounce (Continued on page 6)

6 (Continued from page 5) Gold American Arts Medallions, struck from , are not legal tender coins. If carried across international borders, the owner would need to pay import taxes. Also, the 1980 and 1981 issues do not state their gold content. The Austria 100 Coronas were restruck after World War 2 and dated 1915 to get around American laws before 1975 about owning gold coins. But, the requirement was that the metal content had to match the original coins, which contain ounce of gold. Some people prefer exact weight issues for ease of calculation. The Mexico 50 Peso, which mostly are modern restrikes like the 100 Corona, does state its gold content, 37.5 grams, which is troy ounces of gold. But, similar to the 100 Corona, it also does not state its troy ounce gold content For those who prefer exact weight pieces that state their gold content, consider the 1 Ounce Ingot (2.9%), South Africa Krugerrand (3.1%), or Canada Maple Leaf (3.5%). Silver and Silver Coins Silver finished on the COMEX today at $15.56, up a healthy $1.26 (8.8%) from seven weeks ago. When silver closed at $15.70 on January 3, that was its highest close since July 16, As I ve already stated, my sense is that the silver market is building a base over the past few weeks from which break upward. But, how will we know if a boom market is really in progress? If silver can exceed its 2018 high of $17.22, we might be there. If silver can top its 2017 peak of $18.53 and stay above it, I would expect prices to rise significantly in fairly short order. The silver market is much smaller, monetarily speaking, than that for gold. Also, most newly mined silver, about 70% comes as a by-product or co-product of mining activity for other metals, such as for gold, copper, zinc, and lead. Thus, any major increase in the price will not quickly turn into a surge of newly mined supply. For these reasons, the price of silver tends to far outpace gold in a bull market. Similarly, in a weak market it will also decline by a greater percentage than gold. Like with the Gold American Eagles, the US Mint s 2018 sales of US Silver Eagle Dollars (18.3%) were at its lowest level since There was an uptick in demand at the tail end of the year, but demand for this coin is hampered by its relative high premium at which it sells above the silver spot price. The US Mint began taking orders for The Month Gold Range % Net Change Silver Range % Net Change Gold/Silver Ratio 83.1 Net change -2.3 Platinum Range % Net Change Platinum/Gold Ratio 0.62 Date Gold Silver Platinum Nov 28 1, Nov 29 1, Nov 30 1, Dec 03 1, Dec 04 1, Dec 05 1, Dec 06 1, Dec 07 1, Dec 10 1, Dec 11 1, Dec 12 1, Dec 13 1, Dec 14 1, Dec 17 1, Dec 18 1, Dec 19 1, Dec 20 1, Dec 21 1, Dec 24 1, Dec 25 closed Dec 26 1, Dec 27 1, Dec 28 1, Dec 31 1, Jan 01 closed Jan 02 1, Jan 03 1, Jan 04 1, Jan 07 1, Jan 08 1, Jan 09 1, Jan 10 1, Jan 11 1, Jan 14 1, Jan 15 1, Jan 16 1, Gold, silver and platinum quotes are working spots at 1:45 EST/EDT each day, quoted in U.S. dollars per troy ounce. Shanghai Gold Exchange premiums above London spot prices as of newsletter date: Gold : -$8.49 (Note: a negative result is unusual and likely temporary) Silver : +$0.88 Current Shanghai Gold Exchange premiums tracked at dated bullion coins from its primary distributors nine days ago. By the time you read this, we should have some 2019 Silver Eagle Dollars in stock for immediate delivery. While we consider them too expensive to represent a good way to own physical silver, they are fund to collect or give away as gifts. If you are looking for a great value in bullion-priced physical silver, I recommend US 90% Silver Coins (4.1%). It has among the lowest premiums of any physical silver product, is extremely liquid, has legal tender status, many older Americans still remember actually spending them (meaning they would recognize them where they might not know many other silver items), and is extremely divisible. One 90% Silver Dime contains about 1/14 of an ounce of silver. For the same expenditure, you can receive at least 13% more ounces of silver in the form of US 90% Silver Coins than you would receive if you acquired US Silver Eagle Dollars. The significant rise in the prices of silver has brought a bit more liquidation of US 90% Silver Coins, with the result that the premium has declined from late November. But the premium is still high enough that these coins are not being sold to refiners to melt down and refine into pure silver. That won t really happen until and if the retail premium drops to about 2%. For those who prefer pure silver forms, the 100, 10, and 1 Ounce Ingots ( %) offer lower premiums than any coins you could purchase. Apollo 11 50th Anniversary Coins Debut January 24 As discussed in the October 31, 2018 issue of Liberty s Outlook, the US Mint will begin selling a series of coins, half dollars, dollars, and $5.00 gold commemoratives to honor the first landing on the Moon in We project that the Proof 5-Ounce Dollar coin, with a mintage limit of 100,000, will quickly sell out and has strong prospects for higher prices. This coin represents three firsts by the US Mint the first Proof 5 Ounce silver coin, the first 5 Ounce silver coin with a face value of $1.00, It will also be the US Mint s first curved (scyphate) 5 Ounce silver coin. There is a significant prospect, depending on order limits set by the Mint, that this coin could sell out within the first day. If you want to speculate and get in on the ground floor, you would need to order online direct from the US Mint almost certainly starting at noon on January 24. More details are available at Liberty s Outlook is published monthly by Liberty Coin Service, 400 Frandor Ave., Lansing, MI Telephone: National 800/ Fax: 517/ Website: path@libertycoinservice.com Patrick A. Heller, Editor. Subscriptions are available at $ per year (12 issues). Send subscription orders and changes of address to the above address. All information is derived from sources believed to be reliable, but accuracy cannot be guaranteed. No guarantee of profitability of any investment or recommendation contained herein is made or implied. Liberty Coin Service has been a dealer in rare coins and precious metals since Find recent commentaries and like our Facebook page at or on Twitter The publisher, its principals and associates may, from time to time, have a position in items recommended here. Copyright 2019, all rights reserved.

7 Liberty Coin Service Computer Quotes 2PM EST Item Qty Fine Wt Price Cost/Oz Premium *U.S. 1 Oz Gold Eagle , % *U.S. 1/2 Oz Gold Eagle % *U.S. 1/4 Oz Gold Eagle % *U.S. 1/10 Oz Gold Eagle % *U.S. 1 Oz Gold Buffalo , % *U.S. 1 Oz Medallion , % *U.S. 1/2 Oz Medallion % *Australia 1 Oz Kangaroo , % *Austria 100 Corona , % *Austria 1 Oz Philharmonic , % *Canada 1 Oz Maple Leaf , % *Canada 1x25 Maplegram , % *China 30 Gram Panda , % *China 1 Oz Panda , % *Mexico 50 Peso , % *S. Africa Krugerrand , % *1 Oz Ingot , % *Austria 1 Ducat % *British Sovereign % *France 20 Franc % *Swiss 20 Franc % $20 Liberty BU , % $20 St Gaudens BU , % $20 Liberty Extremely Fine , % $10 Liberty Extremely Fine % $10 Indian Extremely Fine % $5 Liberty Extremely Fine % $5 Indian Extremely Fine % $2.50 Liberty Extreme Fine % $2.50 Indian Extreme Fine % *U.S. 90% Silver Coin 1, , % *U.S. 40% Silver Coin 1, , % *U.S. Peace Dollars, VG+ 1, , % *U.S. Silver Eagles 1,000 1,000 18, % *Canada Silver Maple Leaf 1,000 1,000 17, % *100 Oz Silver Ingot , % *10 Oz Silver Ingot % *1 Oz Silver Ingot 1, % *1 Oz Platinum Ingot % *U.S. 1 Oz Platinum Eagle % *Canada Palladium ML , % Liberty Coin Service Call Toll-Free: (800) National 400 Frandor Avenue (517) Local Lansing, MI (517) Fax web: path@libertycoinservice.com Trading Desk Hours (Eastern): Mon-Fri 9:30AM-6PM, Sat 10AM-2PM Spot Prices Gold: $1, Silver: $15.61 Platinum: $ Palladium: $1, By Allan Beegle LCS Chief Numismatist As typical for December, when people are more focused on gift shopping than on their investments, our sales of precious metals fell short of levels in the prior months. However, our sales of numismatic items and other collectables were extremely active. Along with strong sales, we were also quite busy purchasing some amazing rarities. Once again, almost every item featured in last month s issue sold. Last week, LCS General Manager Tom Coulson and LCS Communications Officer Patrick A. Heller flew to Orlando to walk the floorat the Florida United Numismatists convention. This is the largest coin show in the US. The show was so huge that there simply was not enough time for them to do all the buying and selling that they would like to have done. Still, they were constantly selling material and picking up some great bargains. Between what has come in to our store over the past few weeks and what Tom and Pat brought back from the FUN show, we have a wonderful selection of fresh inventory to offer at money-saving prices. In fact, there is far more than we could offer in this month s newsletter. Consequently, we include a handful of items in our and a offer to give you some idea of desirable fresh inventory. In this column, I feature non-us treasures. To view our much more of our inventory for sale, please check our website at or our two ebay stores under the names of TreasureChestofLiberty and CollectablesOfLiberty. You can also go to our website to view photographs of the pieces offered here. Since just about every item is one-of-a- LCS Postage Charges Value of Contents Postage Charge Under $100 $5 $ $10 $ $18 $ $25 $1,000-4,999 $30 $5,000 and higher None -over-

8 Liberty Coin Service Computer Quotes 2PM EST Spot Prices Coins, Rolls and Sets U.S. 10 pc Gold Medallion Set, , BU $10,150 U.S. Morgan Dollar, 1921, Brilliant Uncirculated Roll/20 $590 U.S. Morgan Dollar, Pre-1921, Brilliant Uncirculated Roll/20 $810 U.S. Peace Dollar, Brilliant Uncirclated Roll/20 $490 Gold: $1, Silver: $15.61 Platinum: $ Palladium: $1, Numismatic Coins (PCGS/NGC/ICG Graded) MS-63 MS-64 MS-65 U.S. $20.00 St Gaudens 1,425 1,510 1,675 U.S. $20.00 Liberty 1,510 1,680 2,705 U.S. $10.00 Liberty 770 1,065 2,205 U.S. $5.00 Liberty ,500 U.S. 4 pc Indian Gold Type Set 3,410 4,760 12,290 U.S. 4 pc Liberty Gold Type Set 2,890 3,790 6,965 U.S. 8 pc Gold Type Set 5,830 8,400 18,805 U.S. Morgan Dollar (Pre-1921) U.S. Peace Dollar Prices quoted are for quantities indicated, and are actual selling prices at today's closes. Smaller lots are available at slightly higher prices. No Michigan Sales Tax on rare coins or precious metals bullion. Numismatic purchases have a 14 day return period. Orders for bullion-priced items (marked with *) are not returnable and, after confirmation, cannot be cancelled. kind, I recommend that you promptly review these offers as well as what is listed online. To purchase the treasures offered in this newsletter, please to confirm availability and make your purchase. Here goes with more fresh goodies we now have in stock: Awesome Quality 1889 and 1898 Sweden Gold 20 Kronors At A Bullion Price: Most all Scandinavian gold coins were rarities until the Norwegian Government Gold Hoard was released in For a time, Danish and Swedish gold coins from the late 1800s and early 1900s were easily obtainable (though Norwegian gold coins remained a bit scarcer). Today, this government hoard (smuggled out of Norway during the German invasion in 1940 to vaults in New York and London) has been dispersed, with supplies somewhat spotty. We recent acquired a small quantity of either 1889 or 1898 Swedish Gold 20 Kronor coins. As this was the era when Sweden ruled Norway ( ), the coins name both countries. Gold content is troy oz. We conservatively grade these coins Very Choice Mint State-64+ and offer them at a bullion price which means that you cannot use a charge card to purchase them. While they last, the less common 1889 coins would cost you $399 apiece and the 1898-dated issues can be yours for $389 each. Very Choice Mint State Austria (Vienna) Silver 6 Kreuzer: Leopold I (the Hogmouth) of Austria reigned as the Holy Roman Emperor from 1658 to 1705, the longest tenure of any Habsburg emperor. Leopold s nickname derived from his protruding jaw. During his reign, he regained dominion over almost all of Hungary that had fallen to the Turks in the early 1500s. He fought three wars against his first cousin, French King Louis the 14th, the last of which was a failed attempt to install one of his sons as the king of Spain. After his death, his son Joseph succeeded him as the Holy Roman Emperor. His daughter Maria Elisabeth served as Governor of Austrian Netherlands (mostly in modern day Belgium), and his daughter Maria Anna married King John V of Portugal and the Algarves, and also prince of Brazil. Six cities in Austria issued national coinage. This silver 6 Kreuzer struck in Vienna is about the size of a US quarter and has an even golden-gray tone. It is the highest graded specimen of only four pieces certified by NGC. It can be yours for $325. Four Specimens Of Mint State Canada 1946 Silver Dollars: From 1935 to 1939 and 1945 to 1967, the Royal Canadian Mint issued silver dollars into circulation. It struck a mere 93,055 pieces in 1946, a lower mintage than any circulation strike Morgan Silver Dollar. That is the 6th lowest mintage of any year of circulating Canadian silver dollars. We normally do not have any 1946 Canadian dollars in stock, much less specimens in Mint State. As a result of an exciting purchase, we can now offer four beautiful Mint State pieces: Mint State-61, NGC Mint State-62, NGC Choice Mint State-63, NGC Choice Mint State-63, ICCS (International Coin Certification Service) If the year 1946 has special meaning to you, these would be lovely mementos. Grace Kelly Silver Dollar: The famous American actress retired from show business at the age of 26 to become Princess of Monaco in 1956 upon marrying Ranier III. Her fairy tale life came to a tragic end in a 1982 car crash. For the 10th Anniversary of their marriage, Monaco issued a large 10 Francs Silver Commemorative. The busts of the two are in the center of the obverse surrounded by Grace Ranier III De Monaco The reverse has the coat of arms, denomination, and reads Xeme Anniversaire Mariage. The coin has been graded Choice Mint State-63 by NGC. It has golden-brown toning around the periphery on both sides. Mintage was a tiny 24,000 pieces. Silver content troy oz. Only $59. Roman Emperor Trajan Silver Denarius: The Roman Empire reached its greatest extent under the reign of Emperor Trajan ( AD). His military sacked the Parthian Empire capital, bringing the annexation of Armenia and Mesopotamia. His predecessor, Emperor Nerva, was unpopular and childless. Nerva s Praetorian Guard compelled him to adopt Trajan as his heir and successor. In turn, Trajan adopted his cousin s orphaned son, Hadrian, to be his heir and successor as Emperor. His rule of moderation so impressed the Senate that they bestowed on him the honorific of optimus(the best), which appeared on coins struck from 105 AD onward. We have two Silver Denarius of Trajan. Both bear Optimus, are well-centered, and depict Trajan s Column (underneath which Trajan was eventually buried) on the reverse. The NGC-certified Choice Fine specimen is not quite round and priced at $175 The uncertified About Very Fine coin has a better planchet. $250. By the way, Trajan s Column in Rome is one of the few structures depicted on ancient Roman coins that still survives today!

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12 Better-Date US Coin Bargains! by Tom Coulson, LCS General Manager Over the past six weeks including at the huge Florida United Numismatists show in Orlando last week, we have purchased a wonderful variety of nice quality Better -Date US Coins. To give you an idea of what we have available in our showroom, at our libertycoinservice.com website and at our treasurechestofliberty ebay store, we have picked a select few treasures to offer here. Then come to our store, check us online, or call to see what else we can offer. Each of these coins listed here have been certified by the Professional Coin Grading Service (PCGS) or Numismatic Guaranty Corporation (NGC) as well as passing our strict quality standards. Some of these pieces are among the finest quality we have handled in our 48 years in business! With only six coins to offer, we have omitted the order blank. Please call to check if the ones you want are still available and lock in your purchase. Review the list, then promptly call our Trading Desk toll-free at For fastest shipment, you can use your Visa, Mastercard, or Discover charge cards to have your purchase shipped to the credit card billing address. As with all of our numismatic items, your satisfaction is guaranteed. You have 14 days upon your receipt to return these coins for a full, prompt, no-questions refund Large Motto Two Cents, Choice Mint State-63 Red and Brown, NGC $225. It is hard to believe how much original Mint orange color that this coin still exhibits, yet NGC calls it just Red and Brown instead of Red. This piece will please the fussiest collector. With a mintage of 16,749,500, PCGS and NGC together over the past 33 years have certified just 316 specimens in this grade or higher. It is definitely one of the more rare coins in its price range. This coin catalogs in PCGS Retail at $275. Coin Values lists it for $ Heraldic Eagle Bust Silver Dollar with 5 Lines in the Shield and a Knob 9, Choice Extremely Fine- 45, PCGS $4,750. The mintage of all varieties of 1798 Silver Dollars is just 287,536. PCGS and NGC did not initially identify this variety, so their population data understates how many coins have survived. Still, this beauty may be the finest example we have ever had in inventory. This specimen lists in PCGS Retail at $5,250. Coin Values catalogs the piece in Extremely Fine-40 quality at $4,500 and at $7,500 in About Uncirculated-50 condition. The last three PCGS-certified coins of this grade that appeared in major auctions sold for $5,170 or more CC Morgan Silver Dollars, Choice Extremely Fine-45, NGC $3,950. This example is the highest quality specimen that we have handled in several years. The 1889-CC Morgan has the 6th lowest mintage of the entire Morgan series, with a mere 350,000 coins struck. As is not unusual for this date, you can still see evidence of the Proof- Like surfaces in the fields. This rarity catalogs for $4,300 in PCGS Retail. Coin Values lists this coin in Extremely Fine-40 condition at $2,750 while About Uncirculated-50 is at $7, $10.00 Liberty, Choice Mint State-63, PCGS $1,250. Even though this coin has a mintage of 208,700, it is the scarcest coin in this grade or higher of those listed in this offer. PCGS and NGC combined have certified only 282 MS-63 coins and a minuscule 15 in all higher grades combined. We had another example of equal quality over two years ago that we offered at

13 $1,595. We were able to take advantage of the subsequent weakness in Pre-1934 US Gold Coin prices to obtain this lovely specimen at a much more attractive price. PCGS Retail lists this coin for $1,600, while Coin Values is at $2, S $20.00 Liberty, Mint State-60, PCGS $1,560. The 1878-S $20.00 Liberty has a huge mintage of 1,739,000. However, virtually all of them entered circulation to meet the needs of the soaring population in the Old West. How scarce is this coin in Mint State? Together, PCGS and NGC have certified 2,033 Mint State specimens. It has also certified more than 420,000 Mint State specimens of the 1904 $20.00 Liberty. Compared to the 1904 date, the 1878-S in Mint State quality is more than 200 times rarer! It has been our fortune to handle a few Mint State specimens over the years, but they don t last long when we are able to get them. PCGS Retail lists this piece at $1,645 while Coin Values is at $1, Spanish Trail Commemorative Half Dollar, Superb Gem Mint State- 67, PCGS $1,995. This is one of the lowest mintages of the Classic Silver Commemoratives, with only 10,000 pieces struck. Even though virtually all were carefully preserved, PCGS and NGC combined have certified only 272 in Superb Gem Mint State-67 condition and a mere 41 pieces in all higher grades. This specimen is one of the finest we have ever handled over 48 years, and may even be the nicest of all! At one time this coin would have cost you almost three times today s price. PCGS Retail catalogs these coins at $2,350. Coin Values only goes as high as Mint State-66 quality, which it lists at $1,400. Stunning Quality Civil War $20.00 Legal Tender Note Rarity! US $20.00 Series of 1862 Second Obligation with American Bank Note Co. New York at bottom, FR# 125, Very Fine-25, PMG $5,300 (buyers in Michigan please add 6% sales tax). At the FUN show last week, a dealer friend who knows we love extraordinary notes tempted us with this beautiful rare treasure. Each of the five varieties of 1862 and 1863 $20.00 Legal Tender Notes are scarce in any grade with even well-worn raggedy specimens often selling for more than $1,000. Because of their high purchasing power during the Civil War, few of these notes were ever printed. The FR# 125 variety offered here, for example, has a printage of a meager 816,000. Paper Money Guaranty has certified a mere 18 specimens of this type in all grades combined! In fact, this Very Fine-25 specimen is tied with one other note for the 3rd highest quality certified by PMG (the only nicer ones grade Choice Very Fine-30 and Extremely Fine-40)! Even better, this note exhibits bold, fresh black and green inks you normally only see on notes of much higher grades (and even the red ink is above average for the grade)! The rarity and the look of this note has the staff at LCS drooling over (but not on) it. It is certain to be one of the prize pieces in any US paper money collection. The center of the front features a vignette of America holding a sword and shield, ready to defend the Union. The text on the reverse reads United States Of America This Note Is A Legal Tender For All Debts Public And Private Except Duties On Imports And Interest On The Public Debt, And Is Receivable In Payment Of All Loans Made To The United States. It was called a Greenback because it was explicitly not redeemable for gold or silver. This may be only the second specimen of the type that Liberty Coin Service has ever had in inventory, with the other example being in a poor, ragged condition. When this treasure sells, we would appreciate one favor from the buyer please contact LCS to offer it back to us if you ever consider parting with it. Patrick A. Heller, LCS Communica-